Netanyahu made his remarks at the end of a long day for Obama, who toured Israeli military facilities and stressed that the two nations share the same concern over Iran's nuclear program.

"There is not a lot of daylight" between Israel and the United States on assessments of the status of Iran's nuclear program, Obama said at the joint news conference.

Netanyahu made special point to the media of noting that Obama had reiterated Israel's right to take steps of its own to defend itself and that includes against Iran.

"Each country has to make its own decisions when it comes to the awesome decision to engage in any kind of military action," Obama said. "And Israel is differently situated than the United States."

Obama was greeted warmly on Wednesday in Israel where he is on a high-profile trip to Israel, his first as president, to assure the Jewish state of U.S. commitment to stopping a nuclear Iran and boost the prospect of peace talks with Palestinians demanding their own state.

"The United States is proud to stand with you as your strongest ally and your greatest friend," Obama said after disembarking from Air Force One at Tel Aviv's Ben Gurion International Airport. "It's in our fundamental security interest to stand with Israel."

"Across this region, the winds of change bring both promise and peril," he said, calling his visit "an opportunity to reaffirm the unbreakable bonds between our nations, to restate America's unwavering commitment to Israel's security, and to speak directly to the people of Israel and to your neighbors."

Obama said his administration would pursue a Mideast peace that would allow residents of the Jewish state to live in peace and free from the threat of terror.

"In this work, the state of Israel will have no greater friend than the United States," the president said after meeting with Israeli President Shimon Peres.

Peres said he welcomed Obama's clear message that "no one should let skepticism win the day, a vision that says clearly that peace is not only a wish, but a possibility."

The two presidents planted a tree brought from the United States to symbolize the relationship between the two nations.

Netanyahu, who has disagreed with Obama on matters of Israeli security, praised the president for his commitment to peace and security for Israel.

"Thank you for standing by Israel at this time of historic change in the Middle East," he said. "Thank you for unequivocally affirming Israel's sovereign right to defend itself by itself against any threat."

The two leaders met again Wednesday evening for dinner at Netanyahu's home, and held their joint news conference afterward.

The White House said it does not expect significant agreements to come out of the trip, in which Obama will also visit Jordan. Obama last visited the region in 2009, traveling to Saudi Arabia and Egypt. He visited the Jewish state in 2008 as a presidential candidate.

But Israelis, both Jews and Arabs, are skeptical that President Obama's visit will lead to anything substantive on the peace front.

"The only thing I expect from this visit is huge traffic jams," said a 60-year-old Jerusalemite on Wednesday, who was watching an early-morning talk show on TV in the small store where he sells lottery tickets, ahead of Obama's arrival.

"When someone comes to Israel to work seriously, he does so quietly, not with a lot of noise," said Natan, who said he could not share his last name because he has worked in Israeli security. For Natan, "peace means that my grandchildren won't have to serve in the army. But that's just a dream," he said.

Preparing for a crush of breakfast customers at the bagel café where he works, Nabulsi Alaa, 26, an Arab resident of East Jerusalem, expressed the hope that the American president's visit will make it possible for Arabs in Israel to visit family and friends in the West Bank, and for Arabs in the West Bank to visit Israel. "I'm somewhat optimistic," Alaa said.

Former U.S. ambassador to Israel Edward Djerejian says the trip is a chance to improve U.S. relations with Israelis and Palestinians and clarify where the United States stands on the tumultuous events of the Middle East.

"I'm a believer in the importance of the personal relationship and dialogue between leaders," said Djerejian, ambassador under President Clinton. "It's important they establish a working relationship ... that can be translated into possible action."

Since Obama last visited, the region has become more dangerous. A 2-year-old rebellion against Syrian President Bashar Assad rages in Syria. Iran is refusing to end its nuclear program despite U.N. sanctions. Islamist governments have gained power in Egypt and Tunisia, and Muslim militias backed by al-Qaeda are on the rise in North Africa and the Persian Gulf states.

Peres referred to these threats in his remarks upon Obama's arrival.

"The greatest danger is a nuclear Iran. We have tried non-military means, but other options are on the table," he said.

"Hamas remains a terror organization that targets innocent people. On the northern border is Iran's proxy Hezbollah. Hezbollah is destroying Lebanon and supporting the brutal massacre of the Syrian people ... fortunately Syria's nuclear capacity was destroyed, but unfortunately there are still chemical weapons."

Peace talks between Israel and the Palestinians have stalled. Israel says the Palestinian Authority refuses to negotiate over the portions of the West Bank that should go to a Palestinian state and those that should be part of Israel. Palestinians argue that Israel will not compromise to their satisfaction, so why negotiate?

Palestinians held small protests in the West Bank and Gaza. Demonstrators in the Hamas-ruled Gaza Strip burned posters of Obama and U.S. flags, accusing the U.S. of being biased toward Israel. The militant Hamas, which has been designated a terror group by the U.S., vows to destroy Israel.

In the West Bank, about 200 activists erected about a dozen tents in an area just outside of Jerusalem to draw attention to Israel's policy of building housing in areas they want for an independent state.

Silvan Shalom, a Cabinet minister in Netanyahu's Likud Party, said a provisional agreement is possible. "Our goal is to reach an agreement (even) if it is in stages," he said.

Dan Schueftan, the director of the National Security Center at the University of Haifa, and a visiting professor at Georgetown University, predicted the Obama visit will accomplish almost nothing for Israeli-Palestinian relations.

"You can't be pessimistic enough. The gaps between the mainstream Israeli and Palestinian positions are too large. You can't have a peace deal without including Gaza," Schueftan said. "But you can't reach a settlement with the (Palestinian President) Abbas that doesn't include Gaza. And Israel can't include Gaza."

Furthermore, he said, the Palestinians won't abandon the "right of return," but "if you bring to Israel every Palestinian whose grandparents left in 1948. No Israeli government could survive if it agreed to this."

"The basic relations between Israel and the U.S. are very, very solid. I think Obama realizes that he went about things in the wrong way in his first term in office and is adopting a different approach that has much more potential to succeed.

"Now, he is emphasizing the positive and is willing to listen to the Israelis. And the recent Israeli election produced a much more centrist reality. We have a much better starting point."

However, Obama arrives at a time when a recent media poll in Israel found just 10% of Israelis view him favorably - in light of his public bouts with Netanyahu, who asked Obama to set a "red line" on when military forces must be used against Iran.

"Obama is retreating from the Middle East, indifferent to the collapse of Egypt, uninterested in the return of al-Qaeda to Iraq, and he appears to have no blueprint for Iran other than more concessions," says Danielle Pletka of the American Enterprise Institute. "So why's he going?"